Tag Archives: rural broadband

In a press release heavy on spin and very light on data, the Federal Communications Commission claimed broadband “is being deployed on a reasonable and timely basis” because the number of people without access to service at a minimum of 25 Mbps download and 3 Mbps upload speeds decreased by 25% in 2017. The reason for this stunning achievement? “FCC reforms”.

But a closer look at the cherrypicked data in the release shows that this feat isn’t so amazing after all.

The “more than 25% drop in Americans lacking access to fixed broadband” claim doesn’t mean that the percentage of unserved dropped from, say, 50% to 25%. The way the press release states it kinda makes you think that’s the case, but when you crunch the numbers you realise that the 6.5 million people who gained access represents about 2% of the population – overall, the number of unserved people dropped from 8% of the U.S. population to 6%.

That’s if you take the FCC’s numbers at face value. Which isn’t a smart thing to do. Yet. The full report, with supporting data, hasn’t been released. Commissioner Jessica Rosenworcel, a democrat, has seen it, though. Her tweeted response is “I beg to differ”.

One key question is where did the data come from?

If, as is likely, it comes directly from the availability reports filed by providers, it might represent increased reporting, rather than increased availability. The number of existing providers filing FCC availability reports – particularly fixed wireless operators of dubious performance – has increased over the past few years, and incumbent wireline operators have become more creative in their claims.

Another bit of manifest nonsense is that policies adopted by the republican majority on the FCC have much to do with actual improvements. The FCC’s claims are based on data that is current as of December 2017, less than a year after the Trump administration was sworn in, and the same month that the republican majority approved its first major policy change, the repeal of network neutrality regulations. For nearly all of 2017, the broadband industry played by Obama era rules.

A 2% increase in the number of people with access to moderately fast broadband would be a notable achievement. We won’t know if that number is legitimate until the FCC publishes all the data its claim is based on. According to the press release, that’s expected “in the coming weeks”.

Comcast says it’s striking a blow for telecoms competition, Ponderosa Telephone says no, it’s cherrypicking business customers at the expense of rural residents. At issue is Comcast’s request to expand the area in which it’s authorised to offer telephone service to include the service territory of Ponderosa Telephone Company, a small, incumbent local exchange carrier (ILEC) that serves parts of Fresno, Madera and San Bernardino counties. Presumably, Comcast is eyeing Fresno and/or Madera counties, where both it and Ponderosa operate.

Historically the California Public Utilities Commission, which regulates telco operating authority, has protected small, rural phone companies from competition. That’s not because of sentimental attachment. Those small telcos serve communities that aren’t sufficiently lucrative markets to attract big incumbents like AT&T and, consequently, are heavily subsidised. As Ponderosa points out in its protest, the CPUC previously concluded that allowing competitors to pick and chose their customers in rural communities would “result in the small ILECs losing revenue and needing to seek a larger draw from the [telephone subsidy] program”.

With no apparent sense of irony, Comcast claims to be fighting for a competitive telecoms market, reminding the commission that it has “found that the presence of competition in local telecommunications markets leads to efficient pricing, improved service quality, expanded product and service capabilities, greater reliability, and increased consumer choice”. But Comcast’s application also says that it won’t expand its footprint and will only increase service in areas where it presently offers video service – areas that are densely populated enough to support its urban/suburban business model. This isn’t about upgrading service or infrastructure in truly rural communities.

Comcast is correct about the benefits of competition, despite going to great expense to avoid facing it elsewhere. But Ponderosa’s point is also true. The more it relies on revenue from remote and economically deprived communities, the more taxpayer subsidies it will need to continue to serve them.

The dispute is formally about voice telephone service, but it involves broadband policy too. Both Comcast and Ponderosa are retail Internet service providers, who rely on privileges granted by state law – either as telephone or video companies – to build wireline infrastructure in the public right of way and access wholesale services. Changing those privileges and protections will also change the economics, and consequently the availability, of broadband service in Ponderosa’s territory.

Do you limit the choices available to homes and businesses in places where revenue runs thicker in order to reduce the subsidies needed to maintain baseline service in more sparsely populated communities? Or do you maintain the status quo – in service as well as public support – for all?

That’s the choice the CPUC has to make, and it comes as no surprise. The commission is in the process of reexamining its telecoms competition policy in rural areas, as both Comcast and Ponderosa point out. Ponderosa argues, correctly, that this is a major policy decision and shouldn’t be made by default in a narrow, administrative proceeding. Near term, the CPUC should reject Comcast’s application, but long term, it has a difficult problem to solve.

There’s no makable business case on the horizon for densified 5G mobile networks in rural communities. AT&T dismisses rural 5G as an “infill” technology, and it and other carriers are not leaning on rural cities and counties for pole access, as they are in richer and more populated parts of California. Pai acknowledges that, but points to fixed 5G service to homes and businesses as a substitute for fiber to the premise systems…

“Contrary to what some people have suggested, I actually think 5G has a very promising future in rural America and part of the reason is, in terms of the possibilities of fixed wireless, given the fiber penetration that some of your members have,” he said. “I think the ability of rural telecom carriers to think broadly about the future of these networks and how to extend this great fiber penetration you’ve got, there’s a huge amount of promise there.”

Pai’s FCC has a mixed record on 5G fixed wireless. On the one hand, the FCC is working on opening up tremendous swaths of spectrum – in the 3.5 GHz, 4 GHz and 6 GHz bands, particularly – to support broadband service. On the other hand, the FCC and other federal agencies are spending billions of dollars to lock rural communities into fixed 4G service for generations to come.

The FCC’s Connect America Fund program is paying for AT&T’s program to replace rural copper networks with limited capacity 4G service, and supporting similar efforts by Frontier Communications. AT&T also won the contest for a national public safety network – FirstNet – that will likewise be 4G based. Pai is not putting his money where his mouth is: the 4G-based systems that the Trump administration is subsidising do not have the potential capacity of the copper networks they’re replacing, let alone substitute for fiber.

The rural/urban broadband divide is deep, according to a report by Microsoft. For people living and working in rural areas, it’s confirmation of what they already know, but it’s valuable nonetheless. Microsoft’s critique of the available data – and the 25 Mbps download/3 Mbps upload speed standard – is a useful corporate counterweight to the claims made by AT&T and Frontier, which are the telcos receiving the lion’s share of federal broadband subsidies for 10 Mbps down/1 Mbps up service in rural California.

The report highlights the annual coverage data submitted to the Federal Communications Commission by Internet service providers. The latest numbers show that 25 million people in the U.S. lack access to what Microsoft calls “a broadband-speed connection to the internet”, i.e. 25 Mbps down/3 Mbps up. Of those, 19 million people live in rural communities – 31% of the U.S. rural population.

California has 1.2 million unserved rural residents, representing 54% of our rural population, according to Microsoft.

Data that Microsoft collects as part of our ongoing work to improve the performance and security of our software and services for customers provides additional evidence that the FCC overestimates broadband usage in the United States. While the FCC reports that 92 percent of Americans have access to broadband, our data indicates that the number of people who connect to the internet at 25 Mbps is probably closer to 49 percent. Largely rural states including West Virginia, Alaska, New Mexico, Arkansas, and Mississippi that rank among the lowest for broadband access according to the FCC are also among the lowest in our data.

Microsoft’s solution is its “Airband Initiative” which, the company says, is aimed at “harnessing unassigned broadcast spectrum known as TV white spaces to bring broadband connectivity to 2 million unserved rural Americans”.

That spectrum is in the 700 MHz range, which is better able to propagate over rural distances and cut through foliage and other obstructions, but also carries less data than more finicky higher frequency bands. That’s the reality of wireless engineering trade offs: there are no magic solutions, only different – and valuable – tools in the kit.

So far, Microsoft has invested in eight companies – including Cal.net in California – that plan to eventually reach about 1.1 million unserved people via fixed wireless service. Microsoft is not releasing actual subscriber or availability data, or disclosing how much it’s investing, though.

The initiative is not philanthropy on Microsoft’s part (nor should it be). The investments might or might not generate a direct return, but the “royalty-free access to…patents and sample source code related to TV white spaces technology” that Microsoft is also contributing could be significant. Using white spaces without interfering with TV broadcasts requires a central frequency coordinator, such as Microsoft or Google, another contender for that role.

The more rural households that Microsoft’s partners serve, then the greater the adoption of Microsoft’s core technology and the better the chance it has of cornering the top spot in that market. If that strategy works, everyone wins. If it doesn’t, Microsoft loses.

The U.S. is in the bottom half of the broadband price league table, according to a report by the Federal Communications Commission. It was published last February, but I just unearthed it and had a chance to take a hard look at the numbers. When you take both standalone and bundled Internet service packages into account, and weight it by the FCC’s market share figures of 25% standalone and 75% bundled subscriptions, the average monthly price ranges from $38 per month to $74 per month, depending on speed.

As you can see from the table above, bundled prices are noticeably cheaper than standalone rates. That implies that broadband service is significantly more expensive in rural areas, where bundle-happy cable operators do not go and expensive Internet-only wireless providers are common.

The FCC used three methods to compare broadband prices in the U.S. to other developed countries. Two were relatively straightforward comparisons, that show that broadband costs more in the U.S. than in most of the other countries studied…

For fixed broadband prices, under the first method comparing unweighted average prices, the United States ranks 18th out of 23 countries that offer fixed standalone broadband plans with download speeds of at least 25 Mbps and less than 100 Mbps, and 26th out of 28 countries that have fixed standalone plans with download speeds of 100 Mbps or greater. When taking into account fixed broadband bundled with video service, the United States ranks 10th out of 20 countries with download speeds of at least 25 Mbps and less than 100 Mbps. For the highest speed bundle plans with download speeds of 100 Mbps or greater, fixed broadband in the United States ranks 23rd out of 25 countries that offer such plans. Using the second approach, the fixed broadband price index analysis, the United States ranks 21st out of 29 countries aggregating both standalone and bundled broadband products.

The third method – a more complicated regression analysis – bumped the U.S. up the charts to number 7. It tries to account for cost differences between countries, and reckons that because customers have so much more online content available in the U.S., broadband is really cheaper because it’s worth so much. Or something like that. On a cash out of pocket basis, it’s still expensive, though.

There were two wins for broadband development policy in Washington D.C. this year, and both were backed by agriculture interests. In March, a big federal spending bill passed, with $600 million going to the new ReConnect broadband infrastructure grant and loan program, and the once-every-five-years farm bill was approved earlier this month, with at least $1.7 billion more for similar purposes.

Congress didn’t do much else, though.

Unless there’s a surprise on Monday, the year will end with one empty seat on the Federal Communications Commission. Geoffrey Starks was appointed to fill a democratic party slot, but the senate never confirmed the nomination. Nor did it renew republican Brendan Carr’s term as an FCC commissioner. Disputes over the FCC’s mobile broadband rural telehealth subsidy programs stalled votes. Starks will have to be reappointed; absent another nominee, Carr will be able to serve for two more years.

Other unfinished business at the federal capitol includes…

Net neutrality – the senate voted to block the FCC’s rollback of network neutrality rules in May, but there wasn’t enough support in the house of representatives to bring the resolution of disapproval to a vote. Only one republican signed on to it, and it didn’t even get full support from democrats.

Privacy and social media – we saw lots of hearings and some disturbingly ignorant questions from elderly lawmakers, but no action on privacy legislation in D.C. Pressure is building for federal preemption, though, as a response to California’s new privacy law and similar initiatives in other states.

Mobile spectrum and small cell deployment – two mobile broadband policy bills by the republican majority’s point man on telecoms issues in the senate – John Thune (R – North Dakota) – are dead. The Streamline act, would have baked much of the FCC’s local pole ownership preemption into law. The Mobile Now act was aimed at opening up more spectrum for both licensed and unlicensed broadband service.

Next year, democrats take over as majority party in the house, Blackburn moves to the still-republican controlled senate, and Thune moves up the republican leadership food chain. Conventional wisdom says the two houses will deadlock, with even less chance of meaningful telecoms policy legislation being passed.

Rural broadband grant money will go to areas where 100% of homes do not have access to sufficiently fast service, which is defined as 10 Mbps download and 1 Mbps upload speeds from a wireline or fixed wireless provider. Mobile and satellite service don’t count. If a mix of grant and loan is applied for, then only 90% of the homes have to be unserved at that level.

The federal agriculture department rolled out its new ReConnect program in a webinar yesterday, and filled in a lot of the details about what sort of areas are eligible, which will score higher than others, and who can apply for the $300 million in grants and $300 million in loan money approved by congress earlier this year.

Grants will go to applicants who score the most points on the program’s grading scale. The fewer people per square mile and the more farms served, the more points a project gets. The points max out at 6 people or fewer per square mile and 20 farms served. Serving businesses, schools, health care and other critical facilities, and tribal lands also rate higher.

Faster speeds are better. The minimum service speed for subsidised projects is 25 Mbps download/3 Mbps upload, but proposals that promise a symmetrical 100 Mbps to every home and business in the project area will score the best.

For the most part, the program will avoid spending money in areas that received broadband subsidies from either state or federal sources.

One question left unanswered – and I asked it – is whether communities where the Federal Communications Commission’s Connect America Fund (CAF–2) is paying incumbent telephone companies to upgrade service to the 10 Mbps down/1 Mbps level (areas where CAF–2 subsidies were auctioned off are explicitly ineligible, though). Those build outs are not yet complete, and not all homes and businesses in a given community are subsidised, so it’s possible that some areas earmarked for CAF–2 money would lack sufficiently fast service and, presumably, be eligible.

Pretty much any organisation other than a sole proprietorship or simple partnership can apply, including local governments, cooperatives and non-profit corporations. There is one catch: either the applicant, or the applicant’s parent company, has to have been in business for at least two years. Start-ups need not apply.

States with better broadband programs will get a boost, too. Extra points go to projects in states that have a broadband development plan, that don’t keep utilities out of the broadband business and streamline permit and environmental clearances.

One intriguing hint was dropped during the webinar. The program managers are anticipating a second round of funding after the initial money is spent. It’s possible that another deal could be cut as part of a federal budget package – that’s where the $600 million came from. But it seems likelier that the new money will come from the $1.7 billion earmarked for broadband grants and loans in the recently passed farm bill.

The ReConnect program, as it’s called, has a lot in common with the 5 year, $350 million per year broadband subsidy funding in the farm bill. Including one important new feature: grants are available, in addition to loans. In the past, most of the broadband development money managed by the agriculture department’s Rural Utilities Service (RUS) was given out as loans. It’s a funding model that works well for established rural service providers, such as electric or telephone cooperatives, but it’s not so useful for new market entrants.

The good news is that any broadband infrastructure built with money from the ReConnect program has to be capable of delivering service at speeds of 25 Mbps down/3 Mbps up. The farm bill goes one step further by requiring subsidised infrastructure to be future proof, at least to a degree.

A proposed project area is eligible if 90% of the homes don’t have access to that level of service. The project area also has to be in a rural area, but that’s generously defined: any city with 20,000 people or fewer, or any urbanised area next to a city with 50,000 or fewer people is eligible.

That limit could change. The farm bill raises the population limit for cities to 50,000 people, and that language might end up applying to the ReConnect program as well. It’s just one of the many details that still have to be worked out. The general outline of the program was published on Thursday, but the application and other detailed requirements won’t be available until February.

The deadline for grant applications is 29 April 2018, with grant + loan and loan-only proposals due later, on 29 May and 28 June 2018, respectively.

The bill also legalises hemp production – the roping, not the doping kind.

The conference report is more than 800 pages long, and until I get through it all in detail I’m not going to try to figure how much broadband money is actually in it. One provision sets aside $350 million a year for five years for just a couple of programs. And there are several more that deal with broadband, directly or indirectly.

What’s clear from a quick read, though, is that rural representatives aren’t buying the nonsense pushed by AT&T and other monopoly telcos (and swallowed hook, line and sinker by the Federal Communications Commission) that 10 Mbps download and 1 Mbps upload speeds are adequate. Although that’s the level that at least some of the new rural grants and loan programs will use to determine eligibility – i.e. if a community has that level of service, it wouldn’t be eligible for subsidies – any infrastructure built with that money will have to do better. The bill sets the minimum speeds for new service at 25 Mbps down/3 Mbps up, and the agriculture department will have to look ahead and raise the bar as necessary to meet “projections of minimum acceptable standards of service for 5, 10, 15, 20, and 30 years into the future”.

That’s true even if it means a do-over in some places…

The [congressional negotiators] are acutely aware of the challenges created by the ever-increasing bandwidth needs of applications running over the Internet. These bandwidth needs mean that the expectation for “broadband-quality service” in urban, suburban, and rural communities increases over time. While protecting project areas provided assistance from a competing USDA-assisted project is essential for program integrity, such protections can result in a lack of further investment in rural broadband systems and rural residents receiving levels of service which degrade relative to expectations over time.

In establishing the broadband buildout speeds, the [congressional negotiators] intend the [federal agriculture secretary] establish requirements for applicants to build systems capable of providing higher quality broadband service as the term of assistance lengthens, to help to ensure that USDA-financed broadband systems are able to meet the connectivity needs of rural residents for the entirety of the length of time such system is protected from overbuilding under USDA’s broadband programs.

The bill allows spending on middle mile projects, which are particularly needed in rural areas where wholesale connections to major Internet hubs, like Silicon Valley, are at best prohibitively expensive but often unavailable at any price.

The report was presented last Friday at MBEP’s 2018 State of the Region event in Seaside. It was based on the work of the broadband leadership team recommended by participants at the 2017 conference and recruited by MBEP earlier this year. The team conducted a survey of residents and businesses in Santa Cruz, San Benito and Monterey counties.

The key finding is that broadband needs are the same whether people live or work in a well-served urban area or a poorly – or even unserved – rural community.

The result was unexpected. The study’s underlying hypothesis was that the region’s diverse economy and communities would have an equally diverse range of broadband needs. As it turned out, there was little difference in the responses from high tech, agricultural or home-based business sectors, or from consumers anywhere.

In retrospect, the findings made perfect sense: a rancher in Bitterwater uses the same cloud-based business tools as a game developer in Santa Cruz, their families watch the same video programs, and their kids do the same homework and take the same online tests.

Federal and state broadband standards do not meet that need. Broadband subsidy programs run by the federal government set 25 Mbps down/3 Mbps speeds up as a minimum, although providers who deliver significantly slower service in rural areas can still receive funding. California’s primary broadband subsidy program, the California Advanced Services Fund, considers speeds as low as 6 Mbps down/1 Mbps up to be sufficient for urban and rural communities alike.

Businesses and households in the Monterey Bay region are also willing to pay for better service…

When asked about ideal download and upload speeds, 63% of business respondents stated they would like to have 100 Mbps or higher download and 61% stated they would like to have 25 Mbps or higher upload. 69% of these businesses said they would be willing to pay $70 or more per month.

50% of respondents in the consumer survey stated that they would like to have download speeds of 100 Mbps or more. 66% of consumers said they were willing to pay $40 to $99 a month for their ideal speeds.

The MBEP survey data was backed up by a separate broadband needs survey run by the County of Santa Cruz and quarterbacked by broadband leadership team member Zach Friend, who is a Santa Cruz County supervisor.

The question addressed at this year’s conference was how do we achieve the goal of making 100 Mbps down/20 Mbps up broadband service ubiquitous in the region? Participants, who represented local governments, Internet service providers, businesses and non-profit organisations, identified better access to capital, greater public-private cooperation and proactive local broadband development policies as the team’s 2019 objectives.